Panama Compliance Report

Regulatory Overview

Regulatory Status

Regulators have not addressed crypto; legal status ambiguous

Key Regulator(s)

**Regulatory Reference

Primary Legislation

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Travel Rule

Adopted — Threshold: Implemented

Tax Reporting

**Foreign-Sourced Capital Gains:** For individuals and businesses resident in Panama, capital gains derived from the trading or sale of cryptocurrencies on *foreign exchanges* or with *non-Panamanian counterparties* are generally considered **foreign-sourced income**. Under the territorial tax system, these gains are **not subject to capital gains tax in Panama.** This is the most common scenario for crypto investors in Panama.. **Panamanian-Sourced Capital Gains:** If, theoretically, a capital gain from cryptocurrency could be definitively proven to originate from a source *within Panama* (e.g., selling crypto through a Panamanian-regulated exchange to a Panamanian counterparty, if such infrastructure existed and was deemed Panamanian-sourced), then it *could* potentially be subject to general capital gains tax rules.. For the sale of real estate or certain securities within Panama, the capital gains tax rate is typically **10%**. However, it is highly unlikely that cryptocurrencies would be uniformly classified as "securities" for this purpose without specific legislation.. **General Business Income:** If an entity's primary business activity is high-frequency crypto trading within Panama, any profits might be classified as regular business income rather than capital gains, and taxed under corporate income tax rules (see below).. **Conclusion:** In practice, most crypto capital gains for Panamanian residents are **tax-exempt** due to the territorial principle.

Key Facts

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